Tesla stock ignores automaker’s second live recall this week

Shares of Tesla Inc. rose on Thursday despite news of a second live recall this week for some of its vehicles and a report of an increase in complaints related to sudden braking incidents.

TeslaTSLA,
-1.60%
the stock is up more than 8% so far this week, outperforming the S&P 500 SPX Index,
-2.44%,
which is up about 2.3%. Software updates, not trips to a Tesla store for service, should resolve the recalls, which likely won’t be costly for Tesla.

The latest recall involves a seat belt chime malfunction potentially affecting 817,143 vehicles, the National Highway Traffic Safety Administration said, including Model S and Model X cars built in 2021 and this year Model Y compact SUVs built from 2020 and mass Model 3. -market sedans built from 2017.

“The chime sound may not activate when the vehicle is started and the driver has not fastened their seat belt,” NHTSA said. Tesla will release an over-the-air software update to fix the alleged defect. Owners will be notified by mail on April 1st.

NHTSA said Tuesday that Tesla is recalling 53,822 vehicles built between 2016 and this year because a “rolling stop” feature can be activated as part of Tesla’s Full Self-Driving beta software.

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The feature allowed vehicles to come to a complete stop without first coming to a full stop if it did not detect moving cars, pedestrians or cyclists near the intersection, among other conditions, NHTSA said.

Deutsche Bank’s Emmanuel Rosner said in a note Thursday that Tesla had released a new version of its beta FSD software to remove the “problematic feature.”

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“The latest update came much faster than previous iterations to address the recall, with version 10.9 rolling out just two weeks ago,” Rosner said.

Since the issue was covered by an over-the-air update and not a “‘physical recall’…we don’t expect any significant cost associated,” he said.

Separately, The Washington Post reported an increase in complaints to NHTSA about Teslas suddenly braking on their own in response to imagined road hazards.

The escalation in complaints coincides with Tesla’s decision last year to switch from radar to a camera-based driver assistance system it calls “Tesla Vision”, the newspaper reported.

The change was controversial and temporarily caused the Model 3 to lose its spot on a Best Cars list for Consumer Reports.

Tesla did not immediately return a request for comment on the latest recall and “phantom braking” report.

Tesla shares have gained nearly 9% in the past 12 months, compared to a gain of more than 18% in the same period for the S&P.

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